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Financial Insurance for Businesses

Understanding financial insurance products and how they protect directors and businesses

Clear guidance on financial loss insurance and where Personal Guarantee Insurance fits.

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What Is Financial Insurance?

Financial insurance refers to insurance products designed to protect businesses against specific financial risks. Unlike property or liability cover, financial insurance focuses on protecting against monetary loss arising from contracts, borrowing, guarantees or professional obligations.

Financial loss insurance provides cover where a financial event results in measurable financial damage involving debt, guarantees or contractual exposure.

For business owners, financial insurance products can help reduce the personal and corporate impact of unexpected financial failure.

Personal Guarantee Insurance (PGI) is a specialist financial insurance type designed to protect directors who have provided personal guarantees for business loans, commercial leases or other borrowing.

It does not prevent insolvency or replace responsible borrowing. Instead, it provides a defined layer of protection where directors would otherwise face direct personal claims.

Why Purbeck
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What Does Financial Loss Insurance Cover?

Financial loss insurance cover varies depending on the policy type. In a commercial context, it may include protection against:

  • Enforced personal guarantees

  • Contractual performance guarantees

  • Certain types of credit risk

  • Financial exposure arising from insolvency

It is important to distinguish business-focused financial insurance from personal loan or consumer protection policies. The products discussed here relate specifically to company directors, business borrowing and commercial risk.


When reviewing insurance personal liability exposure, directors should assess where they may be financially exposed beyond the company structure.

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Why Directors Should Review Their Financial Exposure

Limited company status offers protection in most circumstances. However, personal guarantees remove that protection in relation to specific debts.

When signing a guarantee, directors should consider:

  • The total value of the exposure
  • Whether the guarantee is capped or unlimited
  • The potential impact on personal assets
  • Whether financial guarantee insurance is appropriate

Financial insurance should be viewed as part of prudent risk management. When borrowing to grow a business, protecting personal assets is an equally important consideration.

Case Studies
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The Benefits of Personal Guarantee Insurance

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Invest with confidence

Businesses need capital in order to succeed. PGI allows you to take out the loans you need to grow, all while protecting your personal assets.

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Protect up to 80% of your loan amount

Cover a significant sum and ensure that this bill doesn’t land at your feet if your business becomes insolvent.

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Secure your family’s future

Following insolvency, a demand made under the personal guarantee can have a detrimental impact on your personal assets. Don’t take the risk, find out about how Purbeck can help.

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